What are the options with fees and how does it work?
In the UK, planning how to pay for care, either for yourself or family members, is a key part of managing your money, especially as you get older or if you’re looking at long-term care options. Care costs can be quite high, whether you need help in your own home, in a residential care home, or in a nursing home. These costs can quickly eat into your savings and assets.
The way it works is that if you have a certain amount of money or assets (over £23,250 in England, but this amount can vary in Scotland, Wales, and Northern Ireland), you’ll likely have to pay for your own care. If your assets are below this amount, you might get some help paying for care from your local council. If you need to move into a care home, the value of your house might count as part of your assets, but not if you’re getting care at home.
When planning for care fees, there are a few options to consider:
- Immediate Annuities: If you’re already in care or about to go into care, you can pay a big lump sum upfront in exchange for a guaranteed income for life to help cover your care costs.
- Equity Release: If you own your home, you can get some of the money tied up in it to help pay for care, while still living there.
- Using Savings and Investments: You might decide to use your existing savings or sell some investments to pay for care.
- Care Insurance: This is less common now, but some insurance policies give you a regular payment to help cover care costs in exchange for paying a premium.
It’s also important to think about how paying for care might affect the money or property you want to leave to your family. Getting advice from a financial adviser who knows a lot about care planning can really help. They can guide you through your options and help you make the best choices for your situation.
Lastly, laws and government support for care costs can change, and plans are already in place to change. so keeping up to date is really important for making the best decisions about paying for care.
If you need more help on this you can consider my Dying to Know package or for bespoke and personal guidance you can book a Borrow My Brain using the contact form below.